Does Kim Kardashian really use those gummy vitamins for hair that she's posted about on Instagram with a "#ad" hashtag?
The recent New York Times story about brands paying celebrities like Kim to promote products on their personal social accounts highlights the constant struggle that marketers face when renting social influencers: How can you make paid posts seem as genuine as possible without violating disclosure laws?
In addressing this question, some argue that marketers can find ways around having to use #ad hashtags - much like Airbnb does when it gifts homes to celebrities in exchange for social media promotion. Others say it's best for marketers to just accept that consumers will view these posts as paid endorsements, and even with the #ad disclosure, the exposure is still worth the money.
But for brands that are interested in doing more to come across as genuine, the answer to this question may lie in building a community of owned influencers instead of, or in addition to, renting celebrity or social media influencers.
Owned influencers are your existing customers who have between 500-5000 social followers, are loyal to your brand, and, with some incentivizing, will advocate for your products or services through their social networks. While owned influencers generally have smaller followings than rented influencers, there are a number of ways that they drive significantly better results when it comes to customer acquisition.
1. Leveraging a more authentic voice
Owned influencers are your customers first, with the authentic and authoritative influence that propels their friends, family and followers to action on your behalf.
In contrast, rented influencers often aren't your actual customers. Even if they are, their willingness to post about your brand often only goes as far as the length of time you're willing to pay them for a campaign. For some of these rented influencers, you'll see them promoting one brand's product one year, and a competitive solution the next.
One metric that gives you a sense of owned influencers' relatively greater authenticity is comparing the click-through rates of their posts to those of rented influencers. After gathering 10 billion social impressions across multiple platforms, we found that people are 3X more likely to click on a post from an owned influencer than a rented influencer.
2. Alignment with news feed algorithms
This year, Twitter, Facebook and Instagram all introduced algorithmic news feeds and features based on relational relevance, abandoning the chronological feed almost entirely. While the technical changes are complex, they boil down to this: Posts from friends, family and other strong social connections are much more likely to appear at the top of your feeds than posts by publishers.
If an average consumer posts a recommendation for a product or service, that post is likely to appear towards the top of their followers' news feeds because they have a genuine affinity with them, based on previous interactions. But for celebrity influencers, that affinity score may not be so high - while these users do have a lot of followers, content from people you know and regularly interact with are more likely to appear higher in your feeds.
3. Creating cost-effective campaigns with trackable ROI
Rented influencers can command tens or even hundreds of thousands of dollars for a single tweet, Instagram or Facebook post. Even for the world's most profitable brands or best-funded startups who are able to afford these kinds of fees, it can be difficult if not impossible to track the ROI and justify the spend.
Owned influencers are much less costly to activate, as they're often motivated by elevated brand experiences such as early access to products or VIP events instead of cash payments. In terms of measuring value, brands can track owned influencers using customer data and first-party opt-in data. This offers a much clearer picture of ROI than brands can achieve with rented influencers, which require third party verification tools such as tracking tags or conversion pixels to measure engagement and conversions coming from a post.
In comparing the cost per lead of owned versus rented influencers, brands have to pay less than half a much for each lead that comes from an owned influencer.
Building a community of owned influencers takes time. But when done right, having your most influential customers consistently recommend your products or services can offer incredible value in generating genuine recommendations and brand content that drive conversions.